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Question(s) / Instruction(s):

A cash budget, by quarters, is shown below for a retail company (000 omitted). The company requires a minimum cash balance of $5,000 to start each quarter. Fill in the missing amounts.

 

Quarter

 

 

1

2

3

4

Year

Cash balance, beginning

 

 

 

$9

 

Add collections from customers               

 

 

$125

 

$391

Total cash available

$85    

 

 

 

 

Less disbursements:      

 

 

 

 

 

Purchases of inventory

$40

$58

 

$32

 

Operating expenses         

 

$42

$54 

 

$180

Equipment purchases

$10

$8

$8

 

$36

Dividends

$2

$2

$2

$2

 

Total disbursements

 

$110

 

 

 

Excess (deficiency) of cash available over disbursements

($3)

$30

 

 

 

Financing:

 

 

 

 

 

Borrowings

 

$20

 

 

 

Repayments ( Including Interest)

 

 

 

($7)

 

Total Financing

 

 

 

 

 

Cash Ending Balance

 

 

 

 

 

*Interest will total $4,000 for the year.

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